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New York City Public Worker Pension Funds are on the cusp of selling off or divesting from their fossil fuel stocks. How and why are NYC workers and climate activists so intent on achieving this? What will it mean if they win this? First some background.

Pension Funds are the Capital of US Workers

American workers too often feel overwhelmed by the power of capitalism in general and financial corporations in particular. We may feel we have few economic resources with which to exert our opinions and defend our needs in a system based on money. We may want to challenge “fossil fuel capitalism” that threatens the future for our grandchildren, but how?

Most American workers do own capital in the form of their own homes and, especially, in their pension funds. Often the pension funds are managed with the support and participation of their unions or, more specifically, their union leaders. What if union members were to look closely at our pension funds and see how we could use them to create the kind of world we want: investments in renewable energy, public transportation, affordable housing, public education, regenerative agriculture?

As a sector, pension funds are the single largest institutional investor followed by banks, investment firms, and insurance companies (Global Pension Statistics Project, GPS). Approximately $40 trillion was invested by pension funds in financial markets in 2015 and that gives workers much more financial punch than we realize or use.

Pensions represent deferred compensation to workers and are negotiated through contracts on behalf of union members. The intention is to provide income during retirement years. Workers have the potential financial power through collectively using their pension funds to both protect us through financially insecure times such as these and to have an impact on the world we want to see, the world we want to leave to our children and future generations. Too often the second part of this formula—having an impact on the world we want to see—is totally ignored.

A growing number of American workers are questioning the wisdom of keeping their hard-earned deferred income in fossil fuel holdings. Some unions, particularly public service unions, are joining the other financial entities, like universities, faith organizations, and foundations, which have divested their funds from fossil fuel holdings. Pension funds committed to divestment comprised 12% of all divestment commitments. Globally, a full $5.2 trillion in assets has been pledged to divest from fossil fuels. [Arabella Global Divestment Report, 2016] That’s a huge start! We are denying funds from the fossil fuel industry, devaluing their stocks, stopping to “feed the beast”, making fossil fuel corporations pariahs, like we did with tobacco companies that caused cancer.

On a clear July morning three years ago, dozens of environmental activists pushed their kayaks into the Willamette River in Portland while others rappelled 400 feet from the top of St. Johns Bridge in an attempt to block a Shell Oil ship and its drilling equipment from leaving the port and entering Alaskan waters.

A key piece of Shell’s arctic drilling fleet, the vessel had arrived in Portland for repairs but its departure was delayed by protesters chanting “coal, oil, gas, none shall pass!” during two days of civil disobedience that became known as Summer Heat.

By the time the vessel finally sailed, the stage had been set for what would be a yearlong battle, culminating in an ordinance that banned construction and expansion of fossil fuel infrastructure in the city.

Last month, the Oregon Court of Appeals upheld Portland’s ban as constitutional, affirming the city’s power to regulate the safety and welfare of its residents and sending a powerful signal to cities that they too can take the lead to limit fossil fuel use.

nd while the court ruling could set precedent for similar climate action elsewhere, how Portland passed the nation’s first fossil fuel infrastructure ban holds important lessons for how other communities can use grassroots activism to implement the renewable energy transition in their cities.

On January 10, 2018, the U.K. union UNISON launched a campaign to encourage members of local government pension schemes to push for changes in the investment of their funds – specifically, to “explore alternative investment opportunities, allowing schemes to sell their shares and bonds in fossil fuels and to go carbon-free.” A key tool in this campaign: Local Government Pension Funds – Divest From Carbon Campaign: A UNISON Guide, which states: “Across the UK there are nearly 50 divestment campaigns targeting local government pension funds ….. In September this year, it was revealed that a total of £16 billion is invested in the fossil fuel industry by Local Government Pension funds.” The new Guide explains how the U.K. pension system works for local government employees, and provides case studies of existing divestment campaigns. In addition, it provides “Campaign Resources”, including a model campaign letter, a glossary of pension and investment terms, and it reproduces the Pensions and Climate Motion passed at the 2017 UNISON Delegates conference. The Guide was written by UNISON, in collaboration with ShareAction – a registered U.K. charity that promotes responsible investment practices by pension providers and fund managers.

A report published January 31 by The Hillclaims the budget the Trump administration will release later this month will take an ax to renewable energy funding and carbon reduction research. Specifically, its sources say the administration intends to slash the Department of Energy’s energy efficiency and renewable energy programs by a whopping 72%. In addition, the proposed budget would cut research on fuel efficient vehicles and bio-energy by 82%. Funding for solar energy technology research would suffer a 78% cut. In the process, 250 DOE employees would lose their jobs.

Sun, Sit, and Sell/Sue

Bill McKibben, author of Oil & Honey and founder of 350.org, told The Guardian on February 1 that any hope the federal government will take the lead on climate change or renewable energy was dashed by the State of the Union speech and the Democratic response. Both utterly failed to address climate change, arguably the most serious existential threat ever to humanity and all the species currently sharing the planet with us.

McKibben writes, “If we’re going to make progress on climate change, it’s not going to come through Washington DC — not any time soon. The strategy that’s been evolving for US climate action — and for action in many other parts of the planet — bypasses the central governments as much as possible. That’s because the oil industry is strongest in national capitols — that’s where its money is most toxically powerful. But if frontal attack is therefore hard, its flanks are wide open.”

Channeling Timothy Leary, the 60s era counterculture guru who told us all to “Turn On, Tune In, Drop Out,” McKibben has a three part prescription for what we as individuals can do to move toward a renewable energy future without fossil fuels and carbon emissions. He calls it Sun, Sit, and Sell/Sue and it works like this.

Sun: “The first — joining in work pioneered by groups like the Sierra Club — is to persuade towns, cities, counties, and states to pledge to make the transition to 100% renewable energy. This is now easy and affordable enough that it doesn’t scare politicians. Cities from San Diego to Atlanta have joined in, and they will help maintain the momentum towards clean energy that the Trump administration is trying so hard to blunt.”

Sit: “Job two is to block new fossil fuel infrastructure. In some places, that will be by law. Portland, Oregon, recently passed a bill banning new pipes and such, over the strenuous objections of the industry. In other places it will take bodies — tens of thousands have already pledged to journey to the upper Midwest if and when TransCanada decides to build out the Keystone XL pipeline that Trump has permitted.”

By Thanu Yakupitiyage and Dani Heffernan - Common Dreams, January 18, 2018

San Francisco - On January 24, the San Francisco Retirement Board will vote on a long-awaited resolution to divest San Francisco’s pension fund from fossil fuel companies.

The decision will be seen as an early indication of whether or not the fossil fuel divestment movement can build on the momentum from last week’s historic announcement that New York City would be divesting its pension funds and suing Big Oil for damages caused by climate change.

"This is a definitive moment for San Francisco in the fight for a fossil free world. As the city prepares to host a climate convening of the world's local leaders later this year, it's time to put their money where their mouth is,” said May Boeve, Executive Director of 350.org. “Tackling the climate crisis means that cities everywhere will need to stand up to the fossil fuel industry, specially when federal leaders are slow to act. By divesting their more than $20 billion pension fund from fossil fuels, the City by the Bay will show Big Oil billionaires and communities around the globe that they're serious about real climate action."

Since the campaign launch six years ago, the fossil fuel divestment movement has succeeded in securing commitments from over 800 institutions in over 77 countries representing more than $6 trillion in assets.

In San Francisco, it’s been a long path to next week’s vote. The San Francisco Board of Supervisors voted to endorse fossil fuel divestment in April 2013. Last December, hours before he passed away, Mayor Ed Lee published a piece in Medium endorsing divestment, writing, “By taking the bold step to divest from fossil fuel assets, we are once again taking a strong stand on the essential issue of the environment.”

Meanwhile, many Bay Area institutions have been at the forefront of the divestment campaign. San Francisco State University became the first community college district in the nation to divest from fossil fuels. In the South Bay, the Santa Clara Valley Water District became the first such entity to make a commitment, while Stanford University made an early commitment to divest from coal in 2014.

Divestment has proved an effective tool to help stigmatize the fossil fuel industry and increase investor worries that as the world moves towards renewable energy, coal, oil and gas reserves could become “stranded assets” and drive down the share price of fossil fuel companies. A report from the University of Michigan concluded that the divestment campaign has successfully shifted the conversation around fossil fuels and institutional responsibility to act on climate.

According to many investment advisors and financial experts divesting from fossil fuels poses no significant risk to the portfolio performance. In fact, many are now arguing that as fossil fuel companies become an increasingly risky bet, divestment may be safer than holding onto coal, oil and gas stocks.

"The time to divest from all fossil fuels is now. Our pension board needs to listen to city workers and union members who have testified, written letters, and, presented the facts on the fossil fuel industry for years. SEIU 1021, that counts over 54,000 members in Northern California, publicly supports total divestment,” said Martha Hawthorne, retired RN from the Department of Public Health. “Our hard work built this pension system and we want an end to investments in a system of life killing extraction that endangers our future. We know climate crisis is upon us. This is evident by the drought, record pollution, extreme heat, catastrophic fires and deadly mudslides in just the last few months. We are in a race against time. Divestment is a clear way for San Francisco's pension board to make a difference now."

The nation’s largest environmental groups, notable figures such as Nobel Peace Prize Winner Desmond Tutu and former UN Secretary General Ban Ki-Moon, have all endorsed fossil fuel divestment as a key strategy in fighting climate change.

On January 24, San Francisco has the opportunity to take a bold step forward by announcing that it will join New York City and institutions around the world by divesting from fossil fuels.

Last week AXA announced its sell off of €700m of tar sands investments from its balance sheets, covering 25 tar sands companies and 3 major pipelines projects. Thomas Buberl, the company’s chief executive, called the projects “not sustainable and therefore also not insurable.”

This was a significant win for activists like the UK Tar Sands Network and the Indigenous Environmental Network, who have been calling on financial institutions to end investments in the tar sands projects and pipelines since 2009, and who have most recently taken their campaigning efforts to the insurance industry.

The AXA decision comes just weeks after BNP Paribas broke the news that it will no longer finance new shale or tar sands projects, nor work with companies that mainly focus on those resources. Last Friday, Norway’s largest life insurer, KLP announced that it would exclude from its portfolio any firms that derive 30 percent or more of revenues from the extraction of tar sands. In the same week the World Bank announced it would cease financing upstream oil and gas after 2019.

It’s welcome news. Based on the financial risks, climate impacts and indigenous rights violations, we have seen a significant shift in financial institutions backing fossil fuels. The Bank of England now recognizes the monetary risks associated with climate change and is advising the central banks and governments to get out of highly polluting fuels due to the pending carbon bubble and the bad business associated with ‘extreme’ energy extraction. As a result BP, Shell, Exxon and others have pulled out of major tar sands projects and pipelines.

And now the insurance industry is beginning to act more meaningfully. As early as the 1970s, the insurance industry acknowledged the risk of climate change and the need for the sector to take meaningful action. Insurers have already seen the costs of climate related catastrophes and extreme weather events skyrocket, compelling them to be among some of the first movers divesting from coal and also develop policies to stop the underwriting of new fossil fuel projects. But they have massive holdings in fossil fuels. And so they need public pressure to push them to divest.

So despite last week’s news, we must be careful not to pop those champagne corks too fast. Significant action and commitment has yet to be seen by Asian and American insurers. Moreover, regenerative steps need to be taken to ensure that the communities whose livelihoods depend on fossil fuels benefit from the transition to the clean energy economy. Simply put, who will be responsible for the massive clean-ups of stranded projects and direct the green energy transition?

New York City Public Worker Pension Funds are on the cusp of selling off or divesting from their fossil fuel stocks. How and why are NYC workers and climate activists so intent on achieving this? What will it mean if they win this? First some background.

Pension Funds are the Capital of US Workers

American workers too often feel overwhelmed by the power of capitalism in general and financial corporations in particular. We may feel we have few economic resources with which to exert our opinions and defend our needs in a system based on money. We may want to challenge “fossil fuel capitalism” that threatens the future for our grandchildren, but how?

Most American workers do own capital in the form of their own homes and, especially, in their pension funds. Often the pension funds are managed with the support and participation of their unions or, more specifically, their union leaders. What if union members were to look closely at our pension funds and see how we could use them to create the kind of world we want: investments in renewable energy, public transportation, affordable housing, public education, regenerative agriculture?

As a sector, pension funds are the single largest institutional investor followed by banks, investment firms, and insurance companies (Global Pension Statistics Project, GPS). Approximately $40 trillion was invested by pension funds in financial markets in 2015 and that gives workers much more financial punch than we realize or use.

Pensions represent deferred compensation to workers and are negotiated through contracts on behalf of union members. The intention is to provide income during retirement years. Workers have the potential financial power through collectively using their pension funds to both protect us through financially insecure times such as these and to have an impact on the world we want to see, the world we want to leave to our children and future generations. Too often the second part of this formula—having an impact on the world we want to see—is totally ignored.

A growing number of American workers are questioning the wisdom of keeping their hard-earned deferred income in fossil fuel holdings. Some unions, particularly public service unions, are joining the other financial entities, like universities, faith organizations, and foundations, which have divested their funds from fossil fuel holdings. Pension funds committed to divestment comprised 12% of all divestment commitments. Globally, a full $5.2 trillion in assets has been pledged to divest from fossil fuels. [Arabella Global Divestment Report, 2016] That’s a huge start! We are denying funds from the fossil fuel industry, devaluing their stocks, stopping to “feed the beast”, making fossil fuel corporations pariahs, like we did with tobacco companies that caused cancer.

Bill McKibben, Author and co-founder of 350.org is categoric that one of the key ways to tackle climate change is through financial channels: "There is no question we are currently in a state of emergency on climate change. Day in day out people are dying from the effects of climate change. There are many ways to confront this emergency and divestment allows us to get in the way of the money financing the fossil fuel projects behind this crisis.

"The fact that the fossil fuel divestment movement has grown exponentially in the last few years is the best news ever. From the Pacific Islands to South Africa, from the United States to Germany, people are standing up and challenging the power of the fossil fuel industry."

Momentum is gathering at such a speed in the UK it appears to be approaching a tipping point: Waltham Forest and Southwark, two local government pension schemes for boroughs in London, have pledged to fully divest from fossil fuels within the last year, while Hackney's pension fund committed to cut its exposure by 50 percent, as the FT reported recently. Among the UK's Local Government Pension Schemes, these three are on the smaller range, each managing assets between £0.74 and £1.26 billion.

But examples also include the £2.73 billion Environment Agency's Pension Fund, which is currently ranked second in the Asset Owner Disclosure Project's 2017 ranking (first in 2016) among the world's 500 largest asset owners. The fund is widely considered a global leader in terms of aligning investment strategies with the goals called for in the Paris agreement and reducing financial risks associated with the energy transition.

Furthermore, by April 2018, most UK local government schemes are due to be integrated into eight pools, each managing between £12 and £36 billion of pooled assets (see here for a good pooling overview by IPE). Implementation of divestment pledges for individual schemes will depend on the pool structure. The schemes of the London boroughs are already being pooled through London CIV, which recently wrote that it is "focusing on investment strategies the pension fund authorities have shown most demand for, namely: global equity income; sustainable equities; emerging markets and value strategies."

Many other pools are now in the process of hiring executives: Brunel, the pool which contains the Environment Agency's Pension Fund, and LGPS Central have named new chairs within the last month. The London Pension Fund Authority (LPFA) is currently "seeking to recruit additional Board Members with knowledge and experience of either: 1) Environmental Social and Corporate Governance issues in a pension fund, with a strong commitment to delivering divestment from fossil fuels; or 2) strategic and sustainable infrastructure investment by pension funds, with a breadth of experience across all forms of infrastructure investment."

All this indicates that more activity may be expected from the UK's public and private institutional investors. And public pressure is rising as well as various UK local government pension schemes are engaged by campaigners as part of the Global Divestment Mobilisation (GDM) with calls for fossil fuel divestment (see here for complete list of LGPS engagements within the Mobilisation).

Nurses from the San Francisco (SF) Metro Council attended an SF Board of Supervisors meeting to urge the city to divest from any banks and financial institutions who have investments in the Dakota Access Pipeline. The SF Metro Council nurses joined other activists present from the SF NoDAPL Coalition.

After 5 1/2 hours of other agenda items and public comment, The Board of Supervisors voted unanimously to pass the resolution to direct the treasurer/tax collector to update the social responsibility investment matrix to include a screen for all DAPL related investments. This is a significant victory for our ongoing fight to get San Francisco to fully divest from DAPL and pull out their $10 billion from Bank of America.

Kaiser SF RN, Julilynn Carter spoke during public comment about her role as a nurse and how nurses care about public health and the impact climate change has had on public welfare. She also spoke about our collective need to recognize indigenous rights.

Welcome to Interviews for Resistance. Since election night 2016, the streets of the United States have rung with resistance. People all over the country have woken up with the conviction that they must do something to fight inequality in all its forms. But many are wondering what it is they can do. In this series, we'll be talking with experienced organizers, troublemakers and thinkers who have been doing the hard work of fighting for a long time. They'll be sharing their insights on what works, what doesn't, what has changed and what is still the same.

Stephen Lerner: My name is Stephen Lerner. I am a fellow at Georgetown’s Kalmanovitz Initiative for Labor and the Working Poor. I work on the HedgeClippers and bank workers and a number of different campaigns that are all focused on looking up the money tree at who is really running the politics and the economy of the country.

Sarah Jaffe: Let’s start with the bank workers because the bank workers just kicked off a union drive.

Stephen: The bank workers campaign is really interesting, because what most people don’t realize is banks in most countries in the world are significantly unionized. We have a three-pronged campaign. One has been broadly building worker committees in banks in the United States. One of the first real victories of that is the bank workers campaign, the Committee for Better Banks, the Communications Workers of America (CWA), and a whole series of community groups, which we will come back to, were the whistle-blowers on the Wells Fargo scandal, where they were opening fake accounts.

There is an ongoing, growing campaign with workers in all the major U.S. banks, but what we are focusing on now is a bank called Santander, which a Spanish-owned bank which is, again, union in most countries in the world and heavily unionized in Brazil and Argentina. In the United States they are primarily a northeastern bank, but they are also a big national subprime auto lender. There is now a global demand on the bank that they agree not to fight the union and be neutral, the same in the United States as they do in other countries. What was really exciting in the kick-off, and sort of unheard of, is an addition to the traditional solidarity actions, letters and pickets, in Argentina and Brazil, workers actually walked off the job and did shutdowns of bank branches and other centers, demanding the bank not interfere with workers’ rights to organize unions in the United States.

What has been fascinating about the campaign both here in the United States and bank workers in other unions, there has always been a dual demand. The traditional demand about how workers should be paid and treated decently, and simultaneously that workers should not be forced to sell predatory products or cheat people as a condition of employment. What we have argued is that bank workers, in the same way in a hospital a nurse is a frontline on quality care, that bank workers can be the frontline on making sure that banks aren’t cheating and robbing people.

That is why the work with Wells Fargo has been so exciting, because literally tens of thousands of workers have signed petitions saying these outrageous sales goals could only be met if they cheated customers. One part is workers as whistle-blowers, workers as a frontline in saying, “What the bank is doing is bad.” Then, “As workers, we don’t want to participate in a scheme where the bank makes money by cheating people.”

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